Infosys Stock Gets Analyst 'Buy' Rating Despite AI Worries Brokerage Nirmal Bang has resumed coverage of Infosys with a 'Buy' rating and a price target of ₹1,746, suggesting a potential 34% upside from current levels. The firm highlights Infosys's strong balance sheet, consistent cash generation, and a robust deal pipeline as key factors supporting the positive outlook. However, the Indian IT sector faces significant challenges from artificial intelligence (AI), which could disrupt traditional revenue streams and pressure pricing models. While Infosys's financial resilience offers a buffer, its stock valuation and long-term growth prospects remain under scrutiny amid these technological shifts. Nirmal Bang's analysis emphasizes Infosys's structural advantages, including approximately ₹19,900 crore in cash reserves and a debt-free balance sheet. Over the past six years, the company has maintained a Free Cash Flow to Profit After Tax (FCF/PAT) ratio near 100%, reflecting efficient capital management. The brokerage also points to a 40% year-on-year increase in large and mega deal signings during the first nine months of FY26, with net-new Total Contract Value (TCV) rising significantly. This growth in deal activity is expected to bolster future revenue streams, though the broader sector faces headwinds from AI-driven disruption. Infosys currently trades at a trailing twelve-month (TTM) price-to-earnings (P/E) ratio of 17.9x, below its 10-year average of 22.77x. Nirmal Bang considers this valuation approximately 30% below its historical mean, deeming it attractive. For context, competitor Tata Consultancy Services (TCS) trades at a similar P/E of 17.8-18.1x, well below its 10-year median of 26.78x, while HCL Technologies has a higher P/E of 21.1-23.15x.#tata_consultancy_services #hcl_technologies #infosys #nirmal_bang #nifty_it_index
